Summer Budget 2015 : Initial Reaction

“Only 112 days after the last Budget, Chancellor George Osborne has made another round of funding cuts. Echoing the statement made in March, the Chancellor was in a buoyant mood, stating that the economy was ‘fundamentally stronger than it was five years ago’.

“For the fleet industry, there was the expected and welcome freeze on fuel duty, some encouraging news on low emission vehicles, and the fact that no one will pay more tax for a car that they already own.

“What’s more, there was good news in terms of economic growth with news that the UK is one of the fastest growing economies in the developed world.

“The Office of Budget Responsibility revised its growth forecast again, saying the economy will grow 2.4% this year, 2.3% in 2016, before rising again to 2.4% in 2017, and for the rest of the decade.

“This growth is reflected in the most recent figures released by the Society of Motor Manufacturers and Traders (SMMT), which recorded the strongest six-month period to date. Fuelled by fleet growth, 1.3 million car registrations were recorded between January-June 2015 alone.”

Fuel Duty

“Fuel duty was one of the Chancellor’s most reliant crowd-pleasers during the last Parliament. His promise to freeze fuel duty was welcomed by all.

“There is little doubt then that the Chancellor’s decision to uphold this promise in today’s Budget will be received gratefully by both the public and private sectors. Whilst crude oil prices have meant that prices at the pumps have fallen to their lowest this decade, fuel costs remain a significant overhead for businesses and public sector bodies that operate vehicle fleets.”

Low emission vehicles

“Following the Supreme Court’s announcement earlier this year that the Government must do more to curb air pollution, and especially NO2 emissions, it is perhaps surprising that the Budget did not do more to encourage sustainable driving.

“Although the Vehicle Excise Duty announcement does address emissions directly, the Chancellor could have gone further to promote an even larger uptake of environmentally friendly vehicles, especially as the popularity of low emission vehicles has continued to accelerate, with registrations up 70.9% on last year (SMMT).”

Further Information

This announcement comes ahead of the upcoming LeasePlan ‘Fleet Funding Guide’ produced in association with Deloitte. To receive an advance copy email or click here

Matt Dyer

Matt Dyer

Matt Dyer is former MD of LeasePlan UK and the new CEO of LeasePlan US. Matt has been with LeasePlan for over 20 years including roles with LeasePlan Corporation and LeasePlan International. As Chairman of the British Vehicle Rental & Leasing Association (BVRLA) Matt played an active role in representing the key initiatives for the industry.

Read more…